Singapore prepares to embrace high-rollers

October 6, 2009
Singapore Democrats

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Kevin Brown
Bloomberg

In the last week of September, construction teams started lifting into place the steel underpinnings of Singapore’s already leafy latest park, which will float 55 storeys above the city, spanning the three hotel towers of the Marina Bay Sands.

The innovative sky park is just one element in a new type of entertainment area – dubbed the integrated resort concept – aimed at luring high-spending international tourists to the island state and shedding its nanny-state image.

Two such resorts are being built – one by Las Vegas Sands in Marina Bay, and one by Genting, the Malaysian conglomerate, on the resort island of Sentosa.

Both are huge. Marina Bay Sands is expected to cost US$3.6bn with theatres, convention halls, shopping malls, a museum and hotel. Resorts World at Sentosa, costing S$6.6bn (US$4.7bn), will feature a Universal Studios theme park and the world’s largest oceanarium.

At the centre of both complexes are Singapore’s first casinos, controversially approved by the government in an attempt to offer the kind of sophisticated international attraction that is represented by the city’s Formula 1 grand prix.

Many Singaporeans are sceptical about the concept of resorts combining gambling with family entertainment, fearing they may bring gambling addiction and even crime to the tranquil city. However, the operators appear confident the casinos will generate substantial revenue. Michael Leven, president and chief operating officer of Las Vegas Sands, said in August that gaming revenue at Marina Bay Sands was likely to make up about 75 per cent of the resort’s initial earnings before interest, taxes, depreciation and amortisation.

Analysts agree. Edward Ong at Macquarie in Singapore said the gaming market in the city was conservatively estimated at being worth between S$4.5bn and S$4.9bn, suggesting potential revenue of more than S$2bn for each casino.

Abdul Jalil Rasheed, head of equities at Aberdeen Asset Management in Kuala Lumpur, said he was optimistic about the Sentosa project, though it had been plagued by cost overruns.

But much will depend on the pace of the globaleconomic recovery. “We already see a lot of positive economic signs,” said Thomas Arasi, president of Marina Bay Sands.

http://www.ft.com/cms/s/702a5884-b1ce-11de-a271-00144feab49a.html